230 R.I. Code R. 230-RICR-20-55-2.5

Current through December 3, 2024

Section 230-RICR-20-55-2.5 - Requirements for Trust Agreement

A. The deed of trust and all amendments thereto shall be authenticated in such form and manner as the Commissioner may prescribe and shall not be effective unless approved by the Commissioner upon finding that:

1. A deed of trust and its amendments are sufficient in form and in conformity with law;

2. The trustee(s) are eligible and duly appointed to serve as such; and

3. The deed of trust is adequate to protect the interests of the beneficiaries of the trust.

B. The deed of trust and all amendments thereto shall contain provisions which:

1. Vest legal title to Trusteed Assets in the trustee(s), and their successors lawfully appointed;

2. Require that all assets deposited in the trust shall be continuously kept within the United States;

3. Provide for substitution of a new trustee(s) subject to the approval of the Commissioner in the event of a vacancy by death, resignation or otherwise;

4. Require that the trustee(s) shall continuously maintain a record at all times sufficient to identify the assets of such fund;

5. Require that the Trusteed Assets shall consist of cash and/or investments, including accrued investment income thereon if collectible by the trustee(s), eligible for investment in the same manner as the funds of Domestic Insurers;

6. Require that the trust shall be for the exclusive benefit, security and protection of the policyholders, or policyholders and creditors, of the United States Branch and that it shall be maintained as long as there is outstanding any liability of the Alien Insurance Company arising out of its insurance transactions in the United States; and

7. Provide, in substance, that no withdrawals of Trusteed Assets, other than as specified §§ 2.5(C) and (D) of this Part, shall be made or permitted by the trustee or trustees without the prior written approval of the Commissioner except to:

a. Make deposits required by law in any state for the security or benefit of all policyholders, or policyholders and creditors, of the United States Branch;

b. Substitute other assets permitted by law which assets are at least equal in value and quality to those withdrawn, upon the specific written direction of the United States manager when duly empowered and acting pursuant to either general or specific written authority previously given or delegated by the board of directors of the Alien Insurance Company; or

c. Transfer such assets to an official liquidator or rehabilitator pursuant to an order of a court of competent jurisdiction.

C. The deed of trust may provide that statutory net income, earnings, dividends or interest accumulations of the assets of the trust account may be paid over to the United States manager of the United States Branch upon request, provided that the total Trusteed Assets shall not thereby be less than the amount required to be maintained pursuant to § 2.4 of this Part.

D. The deed of trust may provide for the withdrawal of Trusteed Assets for deposit in another state in which the insurer is authorized to do business, if, in lieu of approval by the Commissioner, the deed of trust requires prior written approval of the insurance supervising official of that state for withdrawal of Trusteed Assets, provided that the total Trusteed Assets would not thereby be less than the amount required to be maintained pursuant to § 2.4 of this Part. In any event the deed of Trust shall require the United States Branch to promptly notify the Commissioner in writing of the nature and extent of all withdrawals.

E. The Commissioner may from time to time approve or require modifications of, or variations in, any deed of trust, which in the Commissioner's judgment are not prejudicial to the interests of the people of this state or the United States policyholders and creditors of the United States Branch.

F. The Commissioner may from time to time:

1. Require the trustee(s) to file a statement, in such form as the Commissioner may prescribe, certifying the assets of the trust fund and the amounts thereof;

2. Make examinations of the Trusteed Assets of any Alien Insurance Company licensed under this Part at the insurer's expense; and

3. Make such other and further examinations of the licensed Alien Insurance Company as the Commissioner deems necessary and advisable.

G. Refusal or neglect of any trustee(s) to comply with the requirements of this Part shall be grounds for the Commissioner to require that the Alien Insurance Company remove said trustee(s) and appoint a substitute trustee(s) acceptable to the Commissioner.

230 R.I. Code R. 230-RICR-20-55-2.5